Ohio sends hundreds of millions in gas-tax money to other states

Monday

Feb 20, 2012 at 12:01 AMFeb 20, 2012 at 11:24 AM

Ohio might not face such lengthy delays in sorely needed highway upgrades if the state received a better return on the money its residents pay in federal gasoline taxes. Ohio residents contribute a bigger share each year to the federal fund that pays for transportation improvements across the country than their state has ever received back. The gap cost Ohio $140.5 million in fiscal 2010, the last year for which the Federal Highway Administration calculated state-by-state spending and tax collections.

Robert Vitale, The Columbus Dispatch

Ohio might not face such lengthy delays in sorely needed highway upgrades if the state received a better return on the money its residents pay in federal gasoline taxes.

Ohio residents contribute a bigger share each year to the federal fund that pays for transportation improvements across the country than their state has ever received back. The gap cost Ohio $140.5 million in fiscal 2010, the last year for which the Federal Highway Administration calculated state-by-state spending and tax collections.

Ohio has lost out on $1.5 billion over the past decade and on more than $5 billion since the Federal Highway Trust Fund was created in 1956.

“They talk a lot about federal funds — there are no federal funds,” said Ohio Department of Transportation Director Jerry Wray. “They are funds that come from Ohio and the other states.”

When Wray announced last month that the state should delay 34 major projects across Ohio for as long as 19 years, he said the state could afford $100?million every year in construction projects to expand and improve its highways.

Last year, ODOT had $1.6?billion more work on its calendar than budgets through 2017 allowed.

Although Wray dismissed as outdated the federal policies that take a larger share of money from 24 states and give it to 26 others, he said that discrepancy isn’t to blame for proposed delays that will go before ODOT’s Transportation Review Advisory Council this spring.

The agency has promised too much in the past and isn’t able to deliver in a time of declining gas consumption and rising construction costs, Wray said.

In addition, since fiscal year 2007, nearly $30 billion in subsidies to the federal highway fund have ensured that every state gets back at least one dollar for every dollar it sends to Washington in gas taxes. Ohio drivers have paid almost $8.6 billion in federal gas taxes since 2004, and the state has received nearly $9.8 billion back.

But the funding formulas before subsidies have created a substantial gap between donor states and “donee” states, which get a bigger share back from the federal fund than their residents pay into it through gas taxes.

Alaska has received a share of the trust fund that’s $8.5 billion bigger than Alaskans’ gas-tax contributions through the years would warrant..

In contrast, Texas has received $13.6 billion less. Ohio’s gap is the fourth-largest.

The states on the winning end typically are sparsely populated and geographically large. They include Alaska, Montana, Wyoming and the Dakotas.

States on the losing end — Texas, California, Florida, Ohio and Michigan fare the worst — tend to be among the most populous.

Federal officials say gas-tax money has been pooled since the 1950s because of the need for a national highway system built to a uniform standard. A shift of money was needed because the construction timetable varied from state to state. It also ensured that interstates didn’t suffer or go unconstructed in states with smaller populations.

But in terms of gas-tax revenue percentages, including subsidies, Ohio and other traditional donor states still contribute a bigger share to the national fund than they get in return. And although the difference in percentages is small, the discrepancy adds up to big money.

Ohioans accounted for 3.7 percent of Highway Trust Fund collections in 2010 and received 3.4 percent of its spending, minus the subsidies. That three-tenths of a percent equaled $140.5?m illion, which would more than cover costs for the first phase of planned improvements to I-270’s interchanges at Rt. 315 and Rt. 23 in central Ohio. ODOT has proposed pushing that project back from 2014 to 2027.

“For far too many years, Ohio has paid far more than it has gotten back from the trust fund,” said Sen. Sherrod Brown, D-Ohio.

The state is faring better, Brown said. Thirty years ago, when the federal government also subsidized states’ gas-tax contributions, Ohio received 72 cents for every dollar its residents paid into the highway fund.

Brown said more changes are needed, though, in federal funding formulas.

Sen. Kay Bailey Hutchison, a Republican from Texas, has proposed letting states opt out of the federal program and keep their federal gas-tax money.

Wray said it’s something to consider, although the details might make the idea less appealing. The interstate system is in place, he said, so the need for states such as Ohio to subsidize others has passed.

rvitale@dispatch.com

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